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Ali M-W
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3558 Posts

Posted - 18/11/2008 :  09:36:03  Show Profile Send Ali M-W a Private Message
Hiya,

My apologies - I promised to look up details of the issue about overpayments being foisted on people by HMRC claiming that a renewal form wasn't sent - then promptly forgot who it was who I was looking this up for!

Forgive me - I have been having lots of headaches recently and am not functioning at my best, shall we say.

This seems to be a common issue. Do quote this to your MPs and HMRC. And say you will take it to the Press.

If that doesn't get you somewhere fast, I don't know what will.

Best of luck, both to the person who originally asked (sorry, I forgot your name!) and to the many others dogged by this issue.

Quote follows (please use it and WIN!!!):

The explanation given for overpayment appears to be yet another case of 'missing' Annual Declarations. One of the most controversial causes of overpayment is that when Annual Declarations are filed incorrectly for an award, HMRC annuls the award and calls the payments received an overpayment, when actually the underlying entitlement isn't in question. The victim is basically being fined the whole amount they were paid with absolutely no proof they are at fault. Indeed lost communications at HMRC's end have been found by the Tax Credit Casualties to be a huge factor of most overpayment cases.

HMRC arrogant approach of making victims culpable and liable for HMRC's own administrative failures has been heavily criticised, and the Parliamentary Ombudsman had this to say re missing Annual Declaration cases:

“where the customer’s claims history shows that they have previously responded to HMRC correspondence, then it is unfair and over harsh - and therefore maladministrative - not to accept non receipt as good cause.”
[Parliamentary Ombudsman’s Report Getting things Wrong, Pg 40 pt 3.23]



Morpheus: They are the gatekeepers, they are guarding all the doors and holding all the keys.

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Ali M-W
Mod



3558 Posts

Posted - 20/11/2008 :  08:03:56  Show Profile Send Ali M-W a Private Message
ANNULLED AWARDS LETTER - here's something I've been playing around with, which you are free to use in full or in part - just note that I haven't yet run this by the TCC core members so it's a 'work in progress' rather than definative 'template' letter! Hope it may be of help to some. It can be sent to HMRC and your MP.

____________________________________________________________________

Dear -

I am writing to complain that I have been held unfairly responsible for creating a huge tax credit overpayment on my award by HMRC due to the alleged non-return of my renewal form for the tax year …. to …. . Apparently the Tax Credit Office has 'annulled’ my award because it claims that I didn't return the end of year declaration within the set time limit, forfeiting my whole award. This automatically 'wipes out' my entitlement to all the payments I have already received for that tax year, and is grossly unjust.

It is an abominable policy to punish claimants for allegedly not returning their renewal forms by forcing people like me to lose the tax credits previously awarded, turning a rightful previous entitlement into an overpayment. The Tax Credit Casualties, the user group to which I belong, has flagged up how there can be many reasons why HMRC does not have a renewal pack logged on the system which are not a claimant’s fault, including:

HMRC losing the renewal form itself – just as it has allegedly lost, left unopened or failed to respond to a million items of post, and lost the records of 25 million child benefit recipients and their families only last November.

HMRC failing to record safe receipt of the renewal form, just as it fails to properly record and act upon other tax credit information correctly sent by claimants, thereby breaching its clearly stated responsibility to ‘Record and use information accurately’ or to ‘Update reported changes in circumstances within 30 days’.

The renewal form becoming lost in the post. Unless they have been maltreated by HMRC before, or forewarned of devastating consequences, claimants won’t know the importance of taking their own copy of the pack and sending the original by recorded delivery.

Claimants believing that their not returning a renewal form is their way of exiting a dangerous system which has let them down before, and which they wish to voluntarily opt out of. In this case, it is a genuine misunderstanding arising from poor information by HMRC rather than claimant negligence or non-compliance, and there should be no penalties or punishments.

Claimants not knowing that sending back a renewal form is going in incur them a huge penalty. If claimants do not know this, how can they comply? According to the new COP26, ‘HM Revenue and Customs should: Give correct advice’, as one of its key responsibilities. Surely part of giving ‘correct advice’ is to pre-warn claimants of their own responsibilities and not withhold information which is likely to encourage claimants to behave in ways which are likely to result in huge, recoverable overpayments? Holding claimants to account for HMRC’s abysmal communication is grossly unfair.

Claimants not being given the benefit of the doubt when they claim to have already sent their renewal form to HMRC. The Tax Credit Casualties know of no other situation in which lack of evidence means the person defending themselves from the accusation of wrongdoing or negligence (the claimant) is held to be guilty or in error, apart from in the tax credit system. This in itself goes against the principle of natural justice. Often claimants supply duplicate renewal forms the moment they realise HMRC lacks them, but since HMRC does not give warnings or reminders, and only punishes, claimants are often oblivious of any potential problem until it is too late.

I would like any overpayment arising from your claiming that I did not return my renewal form to be written off immediately. You will note that much has been written on this subject recently, and I am enclosing details of some of the comments other critics of this injustice have made, including a Labour MP.

There can be no justification for penalising me and others with an undeserved overpayment, and this now needs to be written off in full.

(Here further details can be added in justification).

Yours sincerely,





Criticism of the practice of annulling awards:


1. John Hemming, Lib Dem MP:
…There is one aspect of Tax Credit overpayments that has not had the attention that it deserves. Within the Statutes there is a term that basically is intended to ensure that at a certain point the Tax Credit account is closed and cannot be revisited. This means that an annual return figure is agreed and basically cannot be changed later. The problem with this is that HMRC have established guidelines that decree that anyone that fails to return their annual return on time has to pay all the tax credits back. Even a days delay means they have to pay it all back. Again it is worth taking a few moments to work out what is happening. Alistair and Gordon are giving a family some money. The family is supposed to send a note saying that they agree the sum paid. If the note gets lost in the post they are asked to pay all the money back. This is surreal. There are no other circumstances I am aware of where the failure to get a return in on time results in all monies being paid back. If we don't get our tax returns in on time we don't suddenly get all the tax back, what we get instead is a £100 fine. The damage this does to household finances is immense. I solved this issue for one of my constituents through using the threat of judicial review… I thought it would be useful to find out how many people it affects. So I asked "how many payments of child tax credit have involved overpayment because of a failure by HMRC to record the return of an annual declaration.", but got the answer "There should be no overpayments arising because of a failure by HMRC to record the return of an annual declaration." …This is a good example of how the culture of evasion and refusing to answer questions causes bad government. Clearly this needs to change.
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2. Welfare Tax Credits: Overpayments
John Hemming: To ask the Chancellor of the Exchequer how much tax credit has been overpaid as a result of the claimant not providing an annual return to HM Revenue and Customs in each year since the commencement of tax credits; and how many people were overpaid. [197326]

Jane Kennedy: The information requested is available only at a disproportionate cost. However, HMRC does produce estimates of the number of overpaid terminated awards, which will include those that were terminated due to claimants not returning their annual declaration form by the specified date. This information for 2003-04, 2004-05 and 2005-06 is available in the main aggregates table in the HMRC publication “Child and Working Tax Credits Statistics. Finalised Annual Awards. Supplement on Payments 2005-06”. This publication is available on the HMRC website at:You must be logged in to see this link.

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3. Tax Credit Overpayments
Michael Jabez Foster (Hastings and Rye) (Lab): … the concern that I wish to raise today relates to a specific failure in the tax credit system…one that casts families into poverty rather than lifting them out. Through my constituency casework, I have been made aware of several cases…in which an award has been terminated after failure to finalise within the permitted deadline. When that happens, the whole amount paid during the tax year becomes recoverable, even if the family’s circumstances meant that they were fully entitled to all that they received… In many cases, sums of £5,000 or £7,000…are being demanded. It is a sign of how widespread the problem is that over 100 of my parliamentary colleagues have signed an early-day motion that I sponsored on the subject. I am grateful for their support…

…Over and over again, my colleagues and I have raised the issue with the Department. Indeed, the Department now has the benefit of an ombudsman’s report saying that what is happening is wrong, but nothing has been done and no remedy has been found.

I have asked how many households are affected by the issue…so far that information has not been forthcoming….all I can say is that the empirical evidence suggests that the issue is not insignificant. It affects certainly hundreds and perhaps thousands of families, and the support for my early-day motion suggests that it is widespread.

…A family receiving child tax credit continues to receive the benefit after the end of the year for which it is awarded….In order to finalise an award, the applicant is required to complete a record of income for the past year not later than 31 July of the following year...sometimes, for exceptional reasons—or, I dare say, sometimes out of ignorance or gross failure—the forms are not returned in time. Sometimes it is alleged that the forms have been returned, but the Revenue denies receipt. Who knows? I do know, however, that the draconian policy in such situations causes harm.
In such situations, not only does the current payment cease but all payments made during the current year before that cessation are recoverable in full, even if it is deemed subsequently that the award was fully valid. In short, families are being asked to pay, out of no income or a reduced income, an award to which they were entitled, and are thus being plunged into poverty. That cannot be right.

…one of my constituents has five children, two of whom are severely disabled. Although her husband works, they live on a very low income. They failed to finalise their award within the time scale allowed for by HM Revenue and Customs and were notified by letter that they would need to do so. My constituent says that she then sent off the relevant details. There is proof that the tax credit office received the letter, but it did not contain all the information needed to finalise the claim. My constituent says that they wrote again, but heard nothing further.

Some time later, her tax credits stopped altogether, at which point she contacted the tax credit office and was told to reapply, which she did. That was fine—she filed a new claim and started receiving money from November of that year—but all the money that she had received from April to November, even though her income had not changed, was repayable. It came to more than £5,000. The family could ill afford it; in fact, they simply cannot afford it. They have been plunged into poverty as a result of that failure on her part. Whether or not it is her fault, that is simply wrong.

That family, with all its problems, was plunged into poverty. Perhaps my constituent should have been more careful to ensure that the information that she sent was complete, or sent the documentation by recorded delivery to be sure, but the fact is that the average recipient family are not solicitors of the Supreme Court or Ministers of the Crown. They act in normal ways. They get things wrong. Life is hard. To punish them for what is either no fault of their own or simple ignorance is just not right.

In another case, a man with three children suffered serious mental health problems that prevented him from dealing with his affairs during the months when his annual return should have been made. As a consequence, the deadline passed and he and his family were required to repay more than £4,000, the moneys received during the first nine months of the year. The Minister may well tell me that HMRC has discretion to accept exceptional reasons for failing to submit an annual declaration on time. How often is such discretion exercised? The case worker in my office, Andrea Samuelson, who deals with such matters has made it clear to me that discretion has never been exercised in any case that we have dealt with. It is as bad as that, and the experience of the colleagues to whom I have spoken is much the same.

The ombudsman’s 2007 report criticises that failure to exercise discretion, saying that continuing to deny reinstatement would
“be far too harsh a penalty for the delay, work entirely against the policy objectives of the scheme and unnecessarily cause customers avoidable distress and hardship.”


In the particular case that I mentioned, HMRC says that it is unprepared to exercise discretion, as the man’s wife was capable of dealing with the paperwork. That may be true, but at the time she was supporting the family and, as her husband had always dealt with household money issues, she did not act on the letters received.
I fully appreciate why awards need to be finalised and that, for reasons of efficiency, a cut-off date is necessary…I am talking about people who are entitled to the payments that they receive, but who through administrative failure, on their part or the part of others, are penalised in the way that I have described. To plunge deliberately such families into poverty is not just an administrative failing, but something of which we should be ashamed.
… late income tax returns, for example, do not result in the draconian measures such as those arising from late tax credits forms. Late income tax returns do not deny the opportunity for a tax rebate, which stills follows when the application is submitted, however late—up to six years, I believe... Those applications are dealt with according to the facts and on merit.

I can think of no other part of the tax system that imposes penalties as draconian as the loss of one’s entire benefit, as does the tax credit system.

Given its purpose, the ombudsman is quite right when she said that to deny reinstatement causes
“far too harsh a penalty for the delay, works entirely against the policy objectives of the scheme and unnecessarily causes customers avoidable distress and hardship”.


I would like the whole system to be simplified and, indeed—this perhaps is not quite possible—credits to be paid retrospectively. The number of families who do not make a claim through fear of overpayments is becoming more and more significant and certainly does not aid our common cause of reducing child poverty.
My proposal is simple: where a tax credit claim is terminated following a failure to finalise an award, there should be an independent appeals system ..I am not suggesting that there should not be a penalty, but that the current one is disproportionate. We expect more of sometimes vulnerable families than of any other group in the tax system. We do not exercise that sort of draconian power against income or company tax payers or against those who fail to make their VAT returns on time. It is wholly disproportionate, and I want the Government to deal with it now. They have had long enough. There is no excuse or moral or legal reason it should not happen immediately.
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4. EDM 2148 - TAX CREDIT OVERPAYMENTS - 6.10.2008

Foster, Michael Jabez
That this House believes that some families are experiencing excessive hardship through being required to repay tax credits after failing to finalise their award; and considers that the Government should review the statutory recovery of such overpayments and institute an appeals process so that where entitlement for the tax year can be shown, even at a later date, only recovery of a justifiable amount of overpayment should be made.
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Morpheus: They are the gatekeepers, they are guarding all the doors and holding all the keys.
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Ali M-W
Mod



3558 Posts

Posted - 20/11/2008 :  08:11:42  Show Profile Send Ali M-W a Private Message
Looks a bit of a mess as it appears here, but I am sure it can be improved! - Ali



Morpheus: They are the gatekeepers, they are guarding all the doors and holding all the keys.
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n/a
deleted



40 Posts

Posted - 22/11/2008 :  11:39:15  Show Profile Send n/a a Private Message
I've just taken a look at this posting and it's Brilliant Ali, keep up the good work,

R.A. stirling
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jenni
Rank; Hector Tax Inspector



11 Posts

Posted - 23/11/2008 :  16:03:46  Show Profile Send jenni a Private Message
Thanks so much for that Ali- we'll definitely be using it. You must spend HOURS doing this (I do and that's just fighting our own case)- you and everyone else here at tcc are STARS : )
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Ali M-W
Mod



3558 Posts

Posted - 24/11/2008 :  07:56:03  Show Profile Send Ali M-W a Private Message
Thanks, Jenni and Rachel, for the kind words. It just strikes me that MPs and Ministers often make statements in the House of Commons about the tax credit system that are either brilliant suggestions for improving the system which are never properly followed up, or are assertions that the system is functioning and behaving well, when it isn't. Other issues include Primarolo's barefaced lie that court action is only ever used as a 'last resort' (rather than - in many cases - an opening gambit), and her assertion that those with serious illnesses and minimal earning power will have proper consideration and may have their overpayments written off - which has never happened, as far as I can see. Give me time and I will attempt some letters on these topics!

Morpheus: They are the gatekeepers, they are guarding all the doors and holding all the keys.
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VV0808
Rank; Hector Tax Inspector



United Kingdom
6 Posts

Posted - 02/03/2009 :  20:59:02  Show Profile Send VV0808 a Private Message
Thank goodness that I have found this site. On Friday I received a letter telling me that I had lost my appeal against overpayments based on me not having completed my renewal packs in 04/05 and again in 06/07. Today I received a letter demanding I pay the 10k within the next 30 days or arrange repayment over the 12 months - neither of which I can afford.

I have been having palpitations and tears since then, but finding this site has taught me a few things for a start and I have stopped feeling sorry for myself and started to take some action.

1) That I can apply for the SARN and get all the info (I haven't got a clue what I did last week, let alone what I did in 2005)
2)I can ask them to stop recovery in the meanwhile
3)Using the information from the SARN combined with other info in this thread, I can appeal against the appeal decision.

Thank you all so much for your time in keeping up this forum, it may sound dramatic but before I read all this I was wondering what the point in carrying on was... I've only just scraped myself out of debt and this seemed like the last straw!

Any other tips and info would be appreciated
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Ali M-W
Mod



3558 Posts

Posted - 03/03/2009 :  09:37:13  Show Profile Send Ali M-W a Private Message
Hiya VV0808,

Hope you don't mind, but I have moved your post to the thread below, so doesn't get buried or lost:

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Trinity: No one has ever done anything like this.
Neo: That's why it's going to work.

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Ali M-W
Mod



3558 Posts

Posted - 26/03/2009 :  09:27:40  Show Profile Send Ali M-W a Private Message
STOP PRESS!!! Taken from an email from Sarah:

"Had a call from a woman who has been acting as agent for a claimant with a large overpayment. She's managed to get both overpaymenta, she got 1 2 years running, written off because both occurred due to annual declarations being sent out at the wrong time of the year. She wanted to let us know that an officer of HMRC had told her that all overpayments where annual declarations have been sent late should be written off."






Please vote to bring our 'Justice is an Amnesty' campaign to the government’s attention, and ask all your friends to do the same!

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n/a
deleted



4 Posts

Posted - 14/05/2009 :  16:52:20  Show Profile Send n/a a Private Message
Hi There
Im a newbie here, i received an ovepayment request from tax credits in April asking for £330 relating to tax year 04/05. I quered this and was advised it was due to them not receiving my anual update for that period, i challenged them on this and advised it was posted back to them as far as i was concerened.
I have since completed a TC 846 and had a reply this morning after 4 wks advising that under the principles of the revised code of practice 26 (cop26), the information i provided does not change there original decision to recover the o/payment, and that i can not appeal against there decision to ask me to pay it back, but that i can ask them to look at the decision to recover the o/paymnt if i am able to provide new and relevant information. Any thoughts on what i can do next as i dont have any further info as i did post the form back but did not register it.
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Shelley
Rank; Hector Tax Inspector



United Kingdom
25 Posts

Posted - 15/05/2009 :  18:18:04  Show Profile Send Shelley a Private Message
Hi Carola. I am no expert here by any means, but it may be worth putting your post on the new members under a new heading so it gets seen. Everyone here are fantastic in getting replies to you, they all work so hard and are very helpful. Your thread may get lost on this section.
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n/a
deleted



4 Posts

Posted - 15/05/2009 :  18:30:42  Show Profile Send n/a a Private Message
thank you shelley i will do that now cheers
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missfoxee
Rank; Hector Tax Inspector



United Kingdom
8 Posts

Posted - 30/09/2009 :  14:30:59  Show Profile Send missfoxee a Private Message
Just to inform you that I have copied and pasted your template off and amended the minor details (which isnt much as you said it all) and I have sent it off with the TC846 form for TC overpayment adding onto it that (as you suggested) that this form will be sent recorded delivery and that I too have a copy of it.......to prevent the forms getting "lost" again
wish me luck

miss foxee
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missfoxee
Rank; Hector Tax Inspector



United Kingdom
8 Posts

Posted - 30/09/2009 :  15:59:59  Show Profile Send missfoxee a Private Message
ohhhhhhh forgot to mention that I have also sent off a copy to the following peeps

The Rt Hon Gordon Brown -- MP
The Rt Hon Jim Murphy MP -- Secretary Of State For Work And Pensions
The Rt Hon Dawn Primarolo MP -- Minister Of State For The Dept For Children Scools And Families
The Rt Hon Jim Knight MP -- Minister Of State For The Dept.Of Work And Pensions
The Rt Hon John Denham MP -- Secretary Of State For Children Scools And Families

And I am also A Union Rep for USDAW......and am actively involved in many campaigns for justice.......I will endeavor to bring this one up

United We Stand......Divided We Fall

May We All Count As One Voice.
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Ali M-W
Mod



3558 Posts

Posted - 17/08/2010 :  17:22:28  Show Profile Send Ali M-W a Private Message
Just wondering if anyone has had any success with challenging the recovery of overpayments arising from HMRC not receiving - for whatever reason - annual renewal forms?

For those members who tried calling HMRC rather than sending in post, you may be interested in this post, from Ken Frost's "HMRC is Sh1te" site:



Tuesday, 3 August 2010
Hanging On The Telephone - Deadline Extended

Owing to a deluge of last minute calls to HMRC, from people trying to renew their tax credits before last Saturday's 8PM deadline, HMRC's call centres were overloaded and many could not get through.

Therefore HMRC have extended the deadline by a few days, and have stated that they will look "sympathetically" on late callers, on a "case by case basis" (if claimants can show that they tried to ring on Saturday).

Tax does have to be taxing.

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We are close to the season of overpayment demands arising from problems with renewals, so this topic is going to rear its ugly head again soon, I know...

MissFoxee - if you're still around, could we talk Unions please? It's been a while since we had any union action on overpayments....




Morpheus: I'm trying to free your mind, Neo. But I can only show you the door. You're the one that has to walk through it.
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